It emerged at the end of last year that the identities of up to 13,000 civil servants had been stolen from the DWP and used in tax credit fraud. Bacon said he is concerned this was only the tip of the iceberg.

He told Bourn in his letter: "I understand (the tax credit fraud) incident may only be one of a series of episodes of significant organised fraud involving the theft of personal identities from government databases.

"It is of great concern that the departments remain open to organised fraud on such a substantial scale and that their ability to account for how they spend public money is getting worse rather than better.

"I would be most grateful if you would investigate urgently the failure of these government departments to protect personal identities from fraudsters."

An NAO spokesperson told Government Computing News: "We are looking into the letter and giving it some thought and will respond to Richard Bacon when we have decided what to do."

Between April and November 2005 about 40,000 new applications for tax credits and 22,000 existing claims were stopped because of suspected fraud.

The government was forced to close an official website that allowed people to apply for tax credits online because it was being targeted by criminals.